Capital
Planning Advisory Board

Minutes
of the<MeetNo1>2nd Meeting

of
the 2009 Calendar

<MeetMDY1>July 7, 2009

The<MeetNo2>2nd meeting of the Capital Planning
Advisory Board was held on<Day>Tuesday,<MeetMDY2>July 7, 2009, at<MeetTime>9:00 AM, in<Room>Room 169 of the Capitol Annex. Representative
Henley, Co- Chair, called the meeting to order, and the secretary called the
roll.

Guests: Dr. James Votruba, President, Northern
Kentucky University; Major General Edward W. Tonini, The Adjutant General of
Kentucky, Department of Military Affairs; Mr. Ken Lucas, Commissioner, Mr.
David Worley, Executive Director of the Office of Kentucky Veterans Centers,
Ms. Margaret Plattner, Deputy Commissioner, and Jeff Acob, Executive's Staff
Advisor, Department of Veterans Affairs; Mr. Kevin Noland, Interim
Commissioner, and Mr. Tom Engstrom, Division Director of Administrative
Services, Department of Education; Dr.
John Hayek, Vice President for Finance and Planning, Mr. Allen Lind, Vice
President for Information and Technology, and Mr. Sherron Jackson, Assistant
Vice President for Finance and Equal Opportunities, Council on
Postsecondary Education; Mr. Ken Walker, Vice President, and Mr. Gary Cloyd,
System Director for Facilities Management, Kentucky Community and Technical
College System; Mr. John Osborne,
Vice President of Campus Services and Facilities, and Mr. Brian Russell,
Director of Planning, Design and Construction Department, Western Kentucky
University; Dr. Randy Dunn, President, and Mr. Tom Denton, Vice President of
Finance and Administrative Services, Murray State University; Mr. Michael
Walters, Vice President of Administration and Fiscal Services, Morehead State
University; Ms. Angela Martin, Vice President for Planning, Budget and Policy,
and Mr. Dall Clark, Capital Construction Director, University of Kentucky; Mr.
Larry Owsley, Vice President for Business Affairs, University of Louisville;
Mr. Doug Whitlock, President, Harry Moberly, Executive Vice President for
Administration, and Mr. James Street, Associate Vice President for Capital
Planning and Facilities Management, Eastern Kentucky University; Mr. Stephen
Mason, Sr., Chief of Staff and Executive Assistant to the President, and Mr.
Jack McNear, Director of Capital Planning and Construction, Kentucky State
University.

LRC Staff: Don Mullis, Shawn Bowen, and Jennifer
Luttrell

Co-Chair Henley explained that he would be filling in for
Co-Chair Westwood until he arrived.

Co-Chair Henley’s motion to approve the minutes of the June
4, 2009, meeting was seconded by Mr. Hintze and approved by voice vote.

Co-Chair Henley asked Mr. Mullis to go over the
informational items on the agenda.

Mr. Mullis explained that the first information item was
from the Council on Postsecondary Education concerning the Capital Projects
Pool. This pool of funds was appropriated by the 2008 General Assembly and allocated
to institutions on a formula type basis to be used for capital maintenance.
Each institution was required to provide a dollar-for-dollar match. Maintenance
pools have been a top priority for the Capital Planning Advisory Board to
address the tremendous backlog of maintenance and renovation issues at each
institution. Detailed information is provided in the staff analysis of each
institution. Mr. True has expressed interest in a comprehensive review of all
the maintenance and renovation appropriations, the pools that were created, and
how they have been used to date. Capital Planning staff will provide that information
at a future meeting.

The second information item Mr. Mullis discussed was a
modification to the Kentucky River Authority’s (KRA) 2010-2016 Capital Plan. Mr.
Mullis noted that KRA’s presentation at the June 4 Capital Planning Advisory
Board meeting was slightly different from its original capital plan. KRA has
modified proposed projects in Version 2 of the plan to reflect a decrease in
funding for an agency bond funded project. The project, entitled “Repair Dam 7”
will now be funded at $2,800,000 rather than $3,090,000. The project entitled
“Renovate Locks 1 and 2” has been moved from the third to the second biennium
(2012-14) of the planning period.

Mr. Mullis next reviewed the materials provided in the
members' notebooks for the agency plans to be reviewed at this meeting. The format
consisted of a CPAB staff overview, followed by the cabinet/agency
presentation, and a period for questions from the Board.

Dr. James Votruba, President of Northern Kentucky University
(NKU), presented the school’s plan.

Dr. Votruba spoke about the two most critical priorities
facing NKU – a lack of classroom space and funding for maintenance and
operation. He said data showed that there were 6,500 applications for 2,200
positions in the fall. He said the combination of the Health Innovations Center
and the Old Science Building construction project should save the Commonwealth
up to $20 million.

The second most critical need, funding for maintenance and
operational costs, is traditionally provided by the state. Dr. Votruba stated
that the health care industry represents one of the largest sectors for job
growth in northern Kentucky between now and 2015. Another area of need is in
information related fields such as health care and informatics. In 2005, the
health care industry in northern Kentucky invested $315 million in capital
improvement. Also in 2005, the tax revenue brought in by northern Kentucky by
new jobs and investment from the health care industry topped $2.4 million. He
said 50,000 new jobs is a goal of Vision 2015, the regional planning process.
NKU plans to provide the talent needed for these industries.

Dr. Votruba introduced NKU staff Denise Robinson, Interim
Dean of College of Health Professions as well as various members of the
northern Kentucky business community in attendance.

Dr. Votruba stated that the College of Health Professions
enrolls 1,500 students, but the college in the past has had to turn away 400
qualified students because of lack of classroom and laboratory space. To
address this growth, NKU is requesting $92.5 million to create the Health
Innovations Center. This project was CPE’s top priority for construction and
renovation in 2006. NKU is recognized by CPE as one of the two fastest growing
universities in the Commonwealth. CPE also recognizes that NKU has a space
deficit. To reach the average of the regional universities, NKU would need
585,000 additional net square space.

Co-Chair Henley asked what the enrollment would be if NKU
had adequate space. Dr. Votruba responded that enrollment could increase by up
to 600 students. He also stated that by 2020, NKU should enroll 24,000
students.

Mr. True asked how many out of state students attend NKU.
Dr. Votruba responded that about 30 percent of NKU’s student populations are from
out of state. He added that most students select NKU because it is a more
intimate campus with smaller class sizes.

Mr. Hintze asked where the students go who are turned away
from NKU. Ms. Robinson responded that they did not know where students went
that were turned away from NKU, but that many times the students will wait
until the next semester to attend.

In response to a question from Senator Boswell, Dr. Votruba
said that NKU’s goal is to accept all students no matter what their financial
status.

Co-Chair Henley suggested that the universities as a group
study the impact of extending sales tax to services and eliminating the income
tax.

Mr. Hicks asked if being land-locked is a problem for NKU.
Dr. Votruba said that acquiring land has become a challenge and therefore
prudent decisions as to the use of the land must be made.

Relative to NKU’s capital plan, Mr. Hicks asked Dr. Votruba
to discuss the university’s need for a new chiller plant. Dr. Votruba stated
that the new energy efficient plant would service all the buildings on campus.

Co-Chair Westwood then introduced General Edward W. Tonini,
Adjutant General of Kentucky, to present the Department of Military Affairs
(DMA) capital plan.

General Tonini stated that DMA’s plan reflects military
construction data based upon National Guard Bureau’s long-range construction plan
and the Future Year Defense Plan. DMA is requesting $30.5 million in federal
funds for state fiscal year 2010-12, which requires state matching funds of
$7.5 million. The construction of the Readiness Center in Owensboro is the
department’s highest priority. This is a 75/25 percent match for construction
and the land is already available at the local airport. DMA is also requesting
$45.25 million in 2010-12 for capital construction projects, which are to be
self-funded from the proceeds of the defense tenant operations of Bluegrass
Station. DMA is also requesting $13.5 million in appropriated general funds.
General Tonini stated that there is no significant change in this six-year
plan.

Senator Boswell asked if federal stimulus money would be
used to advance the Owensboro project. General Tonini stated that DMA plans to execute
this project by September 2009.

In response to a question from Senator Boswell concerning
local cooperation, General Tonini stated that this has not occurred at this
point, but that they will be able to execute the plan without any formal
arrangements.

General Tonini said if a state fails to execute a project
and there are additional stimulus funds remaining, Kentucky’s DMA would be
ready to take advantage of that opportunity if that did occur.

Mr. True asked if Bluegrass Station would be self-sustained
and if the income would cover the debt service of the bonds. General Tonini
replied that it would.

In response to a question from Mr. True, General Tonini
stated the Finance Cabinet supervises all DMA construction projects. He said
Kentucky has been doing better than many other states as far as maintenance of
its various military facilities.

Representative Crimm asked if any moneys have been spent on
the Hopkinsville Armory in the last ten years and if Ft. Campbell allows the
National Guard in Hopkinsville to work with them in certain facilities. General
Tonini said he did not know the answer to this question, but that DMA has a
great relationship with Ft. Campbell and that any need they may have could be
addressed through this partnership.

Mr. Hicks asked the General to discuss DMA Emergency
Management operations. General Tonini replied that communication problems were
the major issue, a company in the process of launching a satellite that will
allow a cell phone with a chip placed in it to communicate via satellite
instead of cell phone towers. DMA has a tentative agreement with that company
to do the first test in the world in Kentucky for that system.

Mr. Worley stated that the number one priority for DVA is to
build a fourth state veterans’ nursing home in Hardin County. DVA currently has
525 beds in three nursing homes. They plan to expand the western Kentucky
veterans’ center by forty beds. He said the projects would be a combination of
federal funds (65%) and state matching funds (35%).

Mr. True asked if DVA administers the veteran’s shelters.
Mr. Worley stated that DVA runs a program with the Volunteers of America at the
old Leestown VA campus that includes a 40-bed facility for homeless vets. He
said they would like to build another facility because that facility stays
full. He said Mr. Worley added that the Leestown road program this is a
two-year program. Program participants are assisted with needed services to transition
back into the community.

In response to another question from Mr. True, Mr. Worley
replied that the organizations get a per diem rate or grant from the federal government
and then DVA is funded $150,000 by the state to help with this program. Ms.
Plattner added that DVA has a Homeless Veterans Shelter Coordinator who works
with the DOA as a non-profit partnership.

Mr. True asked if this facility is built, would the federal
government still provide a per diem to take care of clients. Mr. Worley stated
that this would still happen, even though it would be a state-run facility.

In response to questions from Senator Westwood, Mr. Worley
said the Thomson Hood Veterans Center is eighteen years old. Relative to DVA’s
capital plan, he said the requested elevator project at Thomson Hood (2,002,000
GF), is a replacement project that will replace four original elevators. He
said they plan to renovate the dining hall in the Jefferson facility.

Mr. Acob stated that DVA is requesting a grant for the
Greenup County project for 100% funding from the federal government, and that the
groundbreaking ceremony would be in August 2009.

Mr. Noland stated that the average age of the buildings at
Kentucky School for the Deaf is 37 years. KDE would like to sell some of those
buildings to fund the other construction projects. One building KDE would like
to sell, the Walker Building, is a residential facility. Students would first need
a building to be able to move into before this could happen. The Statewide Student
Longitudinal Data System, which came from Senate Bill 1 (2008 Session), is also
a priority. The federal government requires a commitment from KDE in terms of
capital as well as operational funds to keep the data system going. Another
priority is a comprehensive disaster recovery plan that would recover all the
data for the 176 school districts in case there was a crash of their system.

Mr. True asked if KDE maintained the vocational schools. Mr.
Noland replied that vocational schools are part of the Education and Workforce
Development Cabinet.

Mr. True asked Mr. Noland to discussed KDE’s project
entitled “Instructional Device Replacement, Phase 1” ($46,400,000 GF). Mr.
Noland said the amount requested would update one-fourth of the computer
workstations in public schools with modern workstations. The impetus behind
this project is to develop a replacement schedule so they do not have computers
in the schools that are eight to ten years old.

Mr. True asked why they were not using the capital
expenditure accounts that the school districts have. Mr. Noland replied that it
would be more difficult for the legislature to appropriate it that way and bonds
are more efficient. Using bond funds provides the districts more flexibility in
choosing technology.

Co-Chair Westwood asked if there would be any savings from
using the Statewide Longitudinal Data System. Mr. Noland said that in the
future there should be savings because there would only be the one system for
all of the districts.

Co-Chair Westwood asked CPE to present. Representing CPE
were Dr. John Hayek, Vice President for Finance and Planning; Mr. Allen Lind,
Vice President for Information and Technology; and Mr. Sherron Jackson,
Assistant Vice President for Finance and Equal Opportunities.

Dr. Hayek said approximately two-thirds of CPE’s projects
are focused on postsecondary education and the rest are focused on the
transition from K-12 to college and from college to the workforce. Half of the
amount requested is for academic programs with about $28 million in facilities with
the remaining projects focused on planning, development, and the educational
pipeline. He added that they are still in the process of working with the institutions
and will have a more streamlined plan in August.

Representative Crimm asked why the library system was moved
from number six to number one on the priority list. Mr. Lind responded that the
system is old and needs to be replaced now.

Co-Chair Henley asked how CPE was planning to run the fiber
optic system. Mr. Lind explained that CPE has an irrevocable right of use, on
strands of “dark” fiber from existing cables that telephone companies have in
place. He added that CPE arranged with the electric municipals to use their
right of way.

Mr. Hicks asked if the first priority is to buy more pipe.
Mr. Lind replied that they would be buying larger pipe at an affordable rate so
they can avoid the price increases. He added that the student demand for this
larger pipe is great because there are many students who attend classes online.

Ms. Henderson asked why CPE’s number one request, the
“Purchase P-20 Learning Object Repository (KyDepot)” project, had increased from
$2 million in the last plan to $4 million in this plan. Mr. Lind explained that
$2 million was an insufficient amount, and CPE has increased its request based
on the review of a similar plan implemented in North Carolina.

Mr. Walker explained that the first seven projects have been
under discussion since the 2006 General Assembly. These projects were approved
and then vetoed by the Governor. They brought the projects back in the 2008
session as contingency funded projects, but they do not anticipate that such
funding will happen this biennium so these projects are being requested in the
next biennium.

Mr. Walker said KCTCS has a number of new construction
projects which consist of a postsecondary education center at Madisonville
Community College which is a collaboration with Murray State University, a new
campus at Maysville Community and Technical College which would replace the
existing campus in Rowan County, a new Allied Health and Science Building at
Hopkinsville Community College, a Phase III construction at the East Park
Campus at Ashland Community College which is well underway and would complete
this campus, a new Allied Health and Science Building at Hazard Community
College, a project to complete the Springfield Campus at Elizabethtown
Community College, North American Racing Academy, the first racing academy in
North America, will be built at the horse park as a permanent facility; and the
Community Intergenerational Center at the Lees Campus on the Hazard Community
College.

Co-Chair Westwood asked Western Kentucky University (WKU) to
present. Representing WKU was Mr. John Osborne, Vice President of Campus
Services and Facilities, and Mr. Brian Russell, Director of Planning, Design
and Construction Department.

Mr. Osborne said WKU is the fastest growing university in
Kentucky. WKU’s top priority is to complete the renovation of the Science
Campus. This has been an ongoing project for the last ten years. The last two
buildings to be renovated are 42 years old and have been rated as inadequate
facilities in a 2006 Vanderweil Facility Advisors, Inc. (VFA) study.

Representative Crimm expressed his concern for the
universities reaching out to the regions. He said he thought the universities
were going to keep the campuses more compact to avoid additional expenses.

Representative Henley asked what kind of research would be
done in the USDA Building. Mr. Osborne stated that the agricultural research
facility would focus its research on animal waste management.

Mr. Hicks asked Mr. Osborne to discuss WKU’s request for a
project to “Renovate Underground Electrical Infrastructure” ($4,500,000 GF). The
project is ranked as WKU’s #2 priority and entails renovation of the existing
electrical distribution infrastructure. Mr. Osborne responded that due to
increased demand and usage, there have been failures in the system that caused
it to shut down. He said a phased managed approach will be used.

Dr. Dunn stated MuSU’s top priority is completing a
three-building complex for science. The second priority is the Resource and
Sustainability Center, which is an annex to complete the complex. This center
at $7 million would contain teaching and lab space and a demonstration site for
“green” technologies. The third priority is the library, which would combine
the two existing libraries that were rated as two of the top ten worst
facilities according to the VFA study. The fourth priority is an $11 million upgrade
to the electrical distribution system, which was also listed on the top ten worst
in the VFA study. The fifth project is a new regional campus facility in Paducah,
which the land for the construction site has already been purchased.

In reference to the Breathitt Veterinary Center project
($27,500,000 GF, #6), Co-Chair Henley asked if federal funds are available to
assist with the project. Dr. Dunn replied that federal funds from a stimulus
grant would assist with the purchase of equipment. Co-Chair Henley suggested
that they look at the Crisp Center for only $7 million instead of the $17
million renovation of the facility.

Co-Chair Westwood asked Morehead State University (MoSU) to
present. Representing MuSU was Mr. Michael Walters, Vice President of Administration
and Fiscal Services.

Mr. Walters stated that the top priority is the renovation and
expansion of the Student Center. This project is in Phase II of the process. In
addition to the priorities, MoSU is requesting agency bonds for the renovation
of two residence halls, the construction of a new apartment configured
residence hall with 400 beds, and the construction of a new food service
facility and parking structure for the new residence hall.

Mr. Hicks asked about the feasibility of the apartment
configured residence hall. Mr. Walters responded that the request for this type
of facility is based on a student assessment the university conducted in 2006.

Mr. Mullis gave a brief overview of UK’s current projects
and priorities for the general fund during this planning process. Mr. Mullis said
that the priorities listed on the power slide are different from what UK listed
in its handout. He then asked Ms. Martin to clarify the difference further. Ms.
Martin stated that the difference in the “Construct Science Research Building
project” is that the $205 million reflects the full cost of the building and
the $130 million is what they will need for the next two years. She added that
UK has a deficit of almost 300,000 square feet of assignable research space,
and this is why this project is the top priority for UK. The second priority is
an academic building for $142.4 million, and the third priority is for
equipment to support the university’s 2,000 faculty members and to help attract
new faculty.

Mr. True asked how many students live on campus. Ms. Martin
replied that approximately one-third of UK students live on campus. She said they
are trying to reach a goal of thirty-seven percent of their students who live
on campus.

In response to questions from Mr. Hicks, Mr. Clark stated
that the location for the Gatton Building is on Euclid Avenue, between the
coliseum and the new dorm complex. Ms. Martin stated that the University is
reviewing Requests for Proposals on the possible expansion project.

Mr. Hintze asked when the Livestock Disease Diagnostic Lab would
be completed. Mr. Clark stated that the goal is for this facility to be completed
by 2010 before the Alltech FEI World Equestrian Games.

Co-Chair Westwood asked University of Louisville (UL) to
present. Representing UL was Mr. Larry Owsley, Vice President for Business
Affairs.

Mr. Owsley stated that UL’s number one priority, Construct –
Belknap Classroom/Academic Building ($75,000,000), is a result of the 2007
space study by VFA. The university has a current classroom space deficit of 28%
(the highest). The second priority is to renovate the 49-year-old Medical
Dental Research Building in order to increase the university’s research space. He
said the university also wants to create a renewal pool of $30 million to
replace roofs, plumbing systems, or major renovations for new construction.

Mr. Owsley said UL plans to sign a contract with Siemens
Buildings Technology to do $19 million worth of energy conservation improvements.
He said these improvements would result in about a 30% reduction in the school’s
utility bill. UL currently has three buildings, which should receive LEED
certification at the silver level.

Representative Crimm commented that the completion of the
science center should help in the development of many different chemical-related
industries. He commended the university on the work it has done on the Shelby
campus. Mr. Owsley added that they are very pleased with the new Biosafety
Laboratory.

Co-Chair Westwood asked Kentucky State University (KSU) to
present. Representing KSU was Mr. Stephen Mason, Sr., Chief of Staff and
Executive Assistant to the President, and Mr. Jack McNear, Director of Capital
Planning and Construction.

Mr. Mason stated that the “Expand & Renovate Betty White
Nursing Building” ($7,825,000 GF) is the university’s top priority. The project will renovate and reallocate space to the
nursing program. The university’s second priority “Replace Boiler and add
Pollution Control” ($4,222,000 GF) will replace a secure a gas boiler to
rectify the heating problems they have and to keep in line with the
Environmental Protection Cabinet. This priority order represents a change from
what was initially submitted by the university. The boiler project has been
moved up from priority no. 4 to priority no. 2.

Mr. Mason added that a pedestrian walkway is needed for
safety purposes to keep students from having to cross the road or go through
the tunnel under East Main. Mr. McNear said they were able to replace some
roofs with emergency funding, but that they need more funding to do complete
replacements instead of patching of the roofs. Mr. McNear also stated that they
are currently working on privatized housing.

Representative Crimm asked about the decrease in enrollment
last year. Mr. Mason invited Dr. Ruby Jones to address this question. Dr. Jones
explained that only fall enrollment decreased and that overall enrollment is
actually up.

Mr. Hintze suggested that KSU work with the Transportation
Cabinet for supplemental funding resources for the pedestrian walkway. Mr.
Mason replied that the university has communicated with the Transportation
Cabinet regarding overpass.

The final capital plan presentation was by Eastern Kentucky
University (EKU). Co-Chair Henley asked Mr. Doug Whitlock, President, Harry
Moberly, Executive Vice President for Administration, and Mr. James Street,
Associate Vice President for Capital Planning and Facilities Management to
discuss the university’s plan.

Mr. True asked Mr. Whitlock to discuss EKU’s housing
situation. Mr. Whitlock stated that most of the housing has been university
owned since 1920. He added that 4,500 students (42%) live on campus.

In response to another question from Mr. True, Mr. Whitlock
stated that EKU does have a remote campus, the new Manchester campus, which has
been a success.

Mr. True asked if the educational pool for educating
teachers was continuing to grow. Mr. Whitlock replied that it was.

Mr. Hintze asked if the Justice Cabinet plans to construct a
facility on EKU’s campus for criminal justice training. Mr. Whitlock stated
that a building to relocate the State Police Academy is listed in the
university’s plan.

Co-Chair Westwood then requested that the Board set the next
two meeting dates. The dates set were September 18 and October 9.